Payment processing

Making Sense of Payment Processing Fees and Surcharges

If you’re running a traditional business that deals primarily in cash and card-present transactions, chances are you find the concept of introducing online payments to your operation intimidating. And who can blame you? The payment processing industry is growing more complex each year and payment processing fees and surcharges can be unpredictable and bewildering.

Starting a business? Download "The merchant services survival handbook" to  learn how to process payments.

But online payments processing doesn’t have to be a nightmare. The best way to approach the latest developments in payments processing is to realize that there’s an individual option for running transactions that works for every business out there. Nowadays customers can pay via their debit or credit card in person or via a mobile phone app or a website. Each of these options, however, can come attached with various types of payment processing fees and surcharges.

Processing fees affect a merchant’s ability to continue growing their business, so it’s important to make sense of them. To that end, we’ve outlined several of the most common types of processing fees and surcharges below. Read on to better your understanding of how payment processing fees and surcharges affect your overhead, and for an optimal solution to minimize payment processing costs.

Types of Fees

There are three major categories payment processing fees for debit/credit cards fall under:

  1. Transactional: These are the fees that will be assessed per every customer transaction and represent the biggest costs of running a merchant account. Key examples of transactional fees are interchange reimbursement and assessment fees.
  1. Flat: These are various fees that you may be charged depending on your payment process. Some flat fees are only applicable in certain instances or conditions, but you will always find some on your monthly statements. Key examples include: terminal fees (charged to merchants with physical stores), payment gateway fees (for those running an e-commerce business site), and Payment Card Industry (PCI) fees.
  1. Incidental: As the title suggests, incidental fees are charged per incidence. Unlike flat fees, which are always charged according to your payment process, incidental fees only occur when you experience a specific incident like fraud or insufficient funds. Key examples of incidentals are chargebacks, retrieval request fees, and non-sufficient funds (NSF) fees.

Pricing of Processing Fees and Surcharges

The rates you will be charged any of the abovementioned fees depends on a lot of factors, but one of the most significant is how high risk your business is. Businesses can be classified as high-risk if they have a poor financial situation or low-credit score, you operate in an industry that has “reputational” hazards (i.e. gambling), or have a high risk of chargebacks.

There’s an important distinction to be made between fees that remain consistent on your monthly statements and ones that are negotiable. The interchange and assessment fees that card-issuing banks and card companies charge your business per transaction and per month are non-negotiable. Each card company publishes their fees online, too. see Mastercard’s interchange terms for example.

The fees you should be most concerned with in terms of how much their pricing can fluctuate are surcharges. A surcharge is what a bank or company will charge your business so that they can make a profit off your payments processing. Unfortunately, these rates are often deliberately made confusing by legalese and mystifying pricing models. But there’s a simple solution to dealing with surcharges—

All-in-One Pricing Models

Payment processing solutions offered by BNA Smart Payments are customized to suit the constantly evolving needs of individual businesses—both high and low risk. Their pricing models for card present terminals are streamlined so that there’s no guesswork involved in starting an ecommerce site.

BNA Smart Payment's experts can provide you with all the info and customer service needed to make your online payment processing easy. As you can see from the discussion above, fees and surcharges can be complex, but they don’t have to be barriers to growing your business.


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Ben Smith

Ben brings 20 years of experience to his role as IT Director for BNA Smart Payment Systems. Among his many directorial duties, he is responsible for the selection, acquisition, development, installation, maintenance, and support of IT infrastructure. Ben also establishes and leads a cross-functional architectural committee, acts as a technical expert and a critical technical resource across multiple disciplines, and consults on all system implementation, modification and integration activities. He graduated with Honours from Durham Collage in Computer Programming, and takes yearly training courses for security and development technologies to remain up-to-date. Outside of work, he loves playing hockey and skating with his family, and also enjoys gardening and cooking.

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